Analysis of Short-term (Operating) Activity Ratios
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
Short-term Activity Ratios (Summary)
Align Technology Inc., short-term (operating) activity ratios
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
| Short-term activity ratio | Description | The company |
|---|---|---|
| Inventory turnover | An activity ratio calculated as cost of goods sold divided by inventory. | Align Technology Inc. inventory turnover ratio deteriorated from 2020 to 2021 and from 2021 to 2022. |
| Receivables turnover | An activity ratio equal to revenue divided by receivables. | Align Technology Inc. receivables turnover ratio improved from 2020 to 2021 but then slightly deteriorated from 2021 to 2022. |
| Payables turnover | An activity ratio calculated as cost of goods sold divided by payables. | Align Technology Inc. payables turnover ratio increased from 2020 to 2021 and from 2021 to 2022. |
| Working capital turnover | An activity ratio calculated as revenue divided by working capital. | Align Technology Inc. working capital turnover ratio improved from 2020 to 2021 and from 2021 to 2022. |
| Short-term activity ratio | Description | The company |
|---|---|---|
| Average inventory processing period | An activity ratio equal to the number of days in the period divided by inventory turnover over the period. | Align Technology Inc. number of days of inventory outstanding deteriorated from 2020 to 2021 and from 2021 to 2022. |
| Average receivable collection period | An activity ratio equal to the number of days in the period divided by receivables turnover. | Align Technology Inc. number of days of receivables outstanding improved from 2020 to 2021 but then slightly deteriorated from 2021 to 2022. |
| Operating cycle | Equal to average inventory processing period plus average receivables collection period. | Align Technology Inc. operating cycle improved from 2020 to 2021 but then deteriorated significantly from 2021 to 2022. |
| Average payables payment period | An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. | Align Technology Inc. number of days of payables outstanding decreased from 2020 to 2021 and from 2021 to 2022. |
| Cash conversion cycle | A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. | Align Technology Inc. cash conversion cycle deteriorated from 2020 to 2021 and from 2021 to 2022. |
Inventory Turnover
Align Technology Inc., inventory turnover calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Cost of net revenues | 1,100,860) | 1,017,229) | 708,706) | 662,899) | 518,625) | |
| Inventories | 338,752) | 230,230) | 139,237) | 112,051) | 55,641) | |
| Short-term Activity Ratio | ||||||
| Inventory turnover1 | 3.25 | 4.42 | 5.09 | 5.92 | 9.32 | |
| Benchmarks | ||||||
| Inventory Turnover, Competitors2 | ||||||
| Abbott Laboratories | 3.10 | 3.59 | 2.99 | 3.07 | — | |
| Cigna Group | 26.13 | 31.58 | 32.70 | 36.70 | — | |
| CVS Health Corp. | 14.05 | 13.52 | 11.88 | 12.06 | — | |
| Intuitive Surgical Inc. | 2.27 | 2.98 | 2.49 | 2.30 | — | |
| Medtronic PLC | 2.20 | 2.43 | 2.23 | 2.44 | — | |
| Inventory Turnover, Sector | ||||||
| Health Care Equipment & Services | 23.27 | 23.69 | 20.89 | 21.66 | — | |
| Inventory Turnover, Industry | ||||||
| Health Care | 10.93 | 10.91 | 9.96 | 10.08 | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Inventory turnover = Cost of net revenues ÷ Inventories
= 1,100,860 ÷ 338,752 = 3.25
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Inventory turnover | An activity ratio calculated as cost of goods sold divided by inventory. | Align Technology Inc. inventory turnover ratio deteriorated from 2020 to 2021 and from 2021 to 2022. |
Receivables Turnover
Align Technology Inc., receivables turnover calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net revenues | 3,734,635) | 3,952,584) | 2,471,941) | 2,406,796) | 1,966,492) | |
| Accounts receivable, net of allowance for doubtful accounts | 859,685) | 897,198) | 657,704) | 550,291) | 439,009) | |
| Short-term Activity Ratio | ||||||
| Receivables turnover1 | 4.34 | 4.41 | 3.76 | 4.37 | 4.48 | |
| Benchmarks | ||||||
| Receivables Turnover, Competitors2 | ||||||
| Abbott Laboratories | 7.02 | 6.64 | 5.40 | 5.88 | — | |
| Cigna Group | 18.64 | 19.35 | 19.47 | 20.05 | — | |
| CVS Health Corp. | 11.79 | 11.91 | 12.32 | 13.04 | — | |
| Elevance Health Inc. | 18.81 | 20.66 | 19.72 | 18.20 | — | |
| Humana Inc. | 55.25 | 45.69 | 66.78 | 60.97 | — | |
| Intuitive Surgical Inc. | 6.60 | 7.30 | 6.75 | 6.94 | — | |
| Medtronic PLC | 5.71 | 5.51 | 6.22 | 4.91 | — | |
| UnitedHealth Group Inc. | 18.22 | 20.07 | 19.86 | 20.32 | — | |
| Receivables Turnover, Sector | ||||||
| Health Care Equipment & Services | 14.72 | 14.99 | 15.09 | 14.97 | — | |
| Receivables Turnover, Industry | ||||||
| Health Care | 9.77 | 9.45 | 9.50 | 9.90 | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Receivables turnover = Net revenues ÷ Accounts receivable, net of allowance for doubtful accounts
= 3,734,635 ÷ 859,685 = 4.34
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Receivables turnover | An activity ratio equal to revenue divided by receivables. | Align Technology Inc. receivables turnover ratio improved from 2020 to 2021 but then slightly deteriorated from 2021 to 2022. |
Payables Turnover
Align Technology Inc., payables turnover calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Cost of net revenues | 1,100,860) | 1,017,229) | 708,706) | 662,899) | 518,625) | |
| Accounts payable | 127,870) | 163,886) | 142,132) | 87,250) | 64,256) | |
| Short-term Activity Ratio | ||||||
| Payables turnover1 | 8.61 | 6.21 | 4.99 | 7.60 | 8.07 | |
| Benchmarks | ||||||
| Payables Turnover, Competitors2 | ||||||
| Abbott Laboratories | 4.15 | 4.21 | 3.80 | 4.07 | — | |
| Cigna Group | 7.31 | 7.68 | 7.75 | 9.34 | — | |
| CVS Health Corp. | 18.07 | 19.14 | 19.72 | 20.13 | — | |
| Elevance Health Inc. | 7.47 | 7.59 | 7.75 | 9.25 | — | |
| Humana Inc. | 8.17 | 8.35 | 7.57 | 8.97 | — | |
| Intuitive Surgical Inc. | 13.78 | 14.45 | 18.35 | 11.08 | — | |
| Medtronic PLC | 4.46 | 4.98 | 4.72 | 4.69 | — | |
| UnitedHealth Group Inc. | 7.26 | 7.63 | 7.29 | 7.21 | — | |
| Payables Turnover, Sector | ||||||
| Health Care Equipment & Services | 8.91 | 9.25 | 9.16 | 9.95 | — | |
| Payables Turnover, Industry | ||||||
| Health Care | 7.55 | 7.68 | 7.52 | 8.05 | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Payables turnover = Cost of net revenues ÷ Accounts payable
= 1,100,860 ÷ 127,870 = 8.61
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Payables turnover | An activity ratio calculated as cost of goods sold divided by payables. | Align Technology Inc. payables turnover ratio increased from 2020 to 2021 and from 2021 to 2022. |
Working Capital Turnover
Align Technology Inc., working capital turnover calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current assets | 2,424,391) | 2,494,075) | 1,849,538) | 1,633,419) | 1,302,479) | |
| Less: Current liabilities | 1,925,887) | 1,924,071) | 1,325,601) | 970,970) | 692,073) | |
| Working capital | 498,504) | 570,004) | 523,937) | 662,449) | 610,406) | |
| Net revenues | 3,734,635) | 3,952,584) | 2,471,941) | 2,406,796) | 1,966,492) | |
| Short-term Activity Ratio | ||||||
| Working capital turnover1 | 7.49 | 6.93 | 4.72 | 3.63 | 3.22 | |
| Benchmarks | ||||||
| Working Capital Turnover, Competitors2 | ||||||
| Abbott Laboratories | 4.48 | 3.87 | 4.06 | 6.64 | — | |
| Cigna Group | — | — | — | — | — | |
| CVS Health Corp. | — | — | — | — | — | |
| Elevance Health Inc. | 8.37 | 7.23 | 6.39 | 6.11 | — | |
| Humana Inc. | 10.27 | 8.67 | 7.42 | 7.19 | — | |
| Intuitive Surgical Inc. | 1.29 | 1.22 | 0.77 | 1.23 | — | |
| Medtronic PLC | 2.97 | 2.15 | 2.48 | 2.26 | — | |
| UnitedHealth Group Inc. | — | — | — | — | — | |
| Working Capital Turnover, Sector | ||||||
| Health Care Equipment & Services | 72.82 | 40.87 | 44.34 | 59.48 | — | |
| Working Capital Turnover, Industry | ||||||
| Health Care | 18.71 | 13.72 | 14.03 | 9.09 | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Working capital turnover = Net revenues ÷ Working capital
= 3,734,635 ÷ 498,504 = 7.49
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Working capital turnover | An activity ratio calculated as revenue divided by working capital. | Align Technology Inc. working capital turnover ratio improved from 2020 to 2021 and from 2021 to 2022. |
Average Inventory Processing Period
Align Technology Inc., average inventory processing period calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Inventory turnover | 3.25 | 4.42 | 5.09 | 5.92 | 9.32 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average inventory processing period1 | 112 | 83 | 72 | 62 | 39 | |
| Benchmarks (no. days) | ||||||
| Average Inventory Processing Period, Competitors2 | ||||||
| Abbott Laboratories | 118 | 102 | 122 | 119 | — | |
| Cigna Group | 14 | 12 | 11 | 10 | — | |
| CVS Health Corp. | 26 | 27 | 31 | 30 | — | |
| Intuitive Surgical Inc. | 161 | 122 | 147 | 159 | — | |
| Medtronic PLC | 166 | 150 | 164 | 150 | — | |
| Average Inventory Processing Period, Sector | ||||||
| Health Care Equipment & Services | 16 | 15 | 17 | 17 | — | |
| Average Inventory Processing Period, Industry | ||||||
| Health Care | 33 | 33 | 37 | 36 | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 3.25 = 112
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Average inventory processing period | An activity ratio equal to the number of days in the period divided by inventory turnover over the period. | Align Technology Inc. number of days of inventory outstanding deteriorated from 2020 to 2021 and from 2021 to 2022. |
Average Receivable Collection Period
Align Technology Inc., average receivable collection period calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Receivables turnover | 4.34 | 4.41 | 3.76 | 4.37 | 4.48 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average receivable collection period1 | 84 | 83 | 97 | 83 | 81 | |
| Benchmarks (no. days) | ||||||
| Average Receivable Collection Period, Competitors2 | ||||||
| Abbott Laboratories | 52 | 55 | 68 | 62 | — | |
| Cigna Group | 20 | 19 | 19 | 18 | — | |
| CVS Health Corp. | 31 | 31 | 30 | 28 | — | |
| Elevance Health Inc. | 19 | 18 | 19 | 20 | — | |
| Humana Inc. | 7 | 8 | 5 | 6 | — | |
| Intuitive Surgical Inc. | 55 | 50 | 54 | 53 | — | |
| Medtronic PLC | 64 | 66 | 59 | 74 | — | |
| UnitedHealth Group Inc. | 20 | 18 | 18 | 18 | — | |
| Average Receivable Collection Period, Sector | ||||||
| Health Care Equipment & Services | 25 | 24 | 24 | 24 | — | |
| Average Receivable Collection Period, Industry | ||||||
| Health Care | 37 | 39 | 38 | 37 | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 4.34 = 84
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Average receivable collection period | An activity ratio equal to the number of days in the period divided by receivables turnover. | Align Technology Inc. number of days of receivables outstanding improved from 2020 to 2021 but then slightly deteriorated from 2021 to 2022. |
Operating Cycle
Align Technology Inc., operating cycle calculation, comparison to benchmarks
No. days
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Average inventory processing period | 112 | 83 | 72 | 62 | 39 | |
| Average receivable collection period | 84 | 83 | 97 | 83 | 81 | |
| Short-term Activity Ratio | ||||||
| Operating cycle1 | 196 | 166 | 169 | 145 | 120 | |
| Benchmarks | ||||||
| Operating Cycle, Competitors2 | ||||||
| Abbott Laboratories | 170 | 157 | 190 | 181 | — | |
| Cigna Group | 34 | 31 | 30 | 28 | — | |
| CVS Health Corp. | 57 | 58 | 61 | 58 | — | |
| Intuitive Surgical Inc. | 216 | 172 | 201 | 212 | — | |
| Medtronic PLC | 230 | 216 | 223 | 224 | — | |
| Operating Cycle, Sector | ||||||
| Health Care Equipment & Services | 41 | 39 | 41 | 41 | — | |
| Operating Cycle, Industry | ||||||
| Health Care | 70 | 72 | 75 | 73 | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= 112 + 84 = 196
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Operating cycle | Equal to average inventory processing period plus average receivables collection period. | Align Technology Inc. operating cycle improved from 2020 to 2021 but then deteriorated significantly from 2021 to 2022. |
Average Payables Payment Period
Align Technology Inc., average payables payment period calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Payables turnover | 8.61 | 6.21 | 4.99 | 7.60 | 8.07 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average payables payment period1 | 42 | 59 | 73 | 48 | 45 | |
| Benchmarks (no. days) | ||||||
| Average Payables Payment Period, Competitors2 | ||||||
| Abbott Laboratories | 88 | 87 | 96 | 90 | — | |
| Cigna Group | 50 | 48 | 47 | 39 | — | |
| CVS Health Corp. | 20 | 19 | 19 | 18 | — | |
| Elevance Health Inc. | 49 | 48 | 47 | 39 | — | |
| Humana Inc. | 45 | 44 | 48 | 41 | — | |
| Intuitive Surgical Inc. | 26 | 25 | 20 | 33 | — | |
| Medtronic PLC | 82 | 73 | 77 | 78 | — | |
| UnitedHealth Group Inc. | 50 | 48 | 50 | 51 | — | |
| Average Payables Payment Period, Sector | ||||||
| Health Care Equipment & Services | 41 | 39 | 40 | 37 | — | |
| Average Payables Payment Period, Industry | ||||||
| Health Care | 48 | 48 | 49 | 45 | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 8.61 = 42
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Average payables payment period | An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. | Align Technology Inc. number of days of payables outstanding decreased from 2020 to 2021 and from 2021 to 2022. |
Cash Conversion Cycle
Align Technology Inc., cash conversion cycle calculation, comparison to benchmarks
No. days
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Average inventory processing period | 112 | 83 | 72 | 62 | 39 | |
| Average receivable collection period | 84 | 83 | 97 | 83 | 81 | |
| Average payables payment period | 42 | 59 | 73 | 48 | 45 | |
| Short-term Activity Ratio | ||||||
| Cash conversion cycle1 | 154 | 107 | 96 | 97 | 75 | |
| Benchmarks | ||||||
| Cash Conversion Cycle, Competitors2 | ||||||
| Abbott Laboratories | 82 | 70 | 94 | 91 | — | |
| Cigna Group | -16 | -17 | -17 | -11 | — | |
| CVS Health Corp. | 37 | 39 | 42 | 40 | — | |
| Intuitive Surgical Inc. | 190 | 147 | 181 | 179 | — | |
| Medtronic PLC | 148 | 143 | 146 | 146 | — | |
| Cash Conversion Cycle, Sector | ||||||
| Health Care Equipment & Services | 0 | 0 | 1 | 4 | — | |
| Cash Conversion Cycle, Industry | ||||||
| Health Care | 22 | 24 | 26 | 28 | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 112 + 84 – 42 = 154
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Cash conversion cycle | A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. | Align Technology Inc. cash conversion cycle deteriorated from 2020 to 2021 and from 2021 to 2022. |